Legislation aimed at Cuban trade barriers

Farm-state members of Congress are trying once again to force the executive branch of the government to remove barriers to sales of wheat, rice and other U.S. agricultural products to Cuba.

Rep. Jerry Moran, R-Kan., and 17 other members have introduced the Agricultural Export Facilitation Act of 2009, legislation that would eliminate the requirement that those products be paid for by the Cuban government prior to shipment.

Most agricultural products are shipped using letters of credit, guarantees by banks that the goods will be paid for when they arrive at their destination. Bush administration officials added the payment in advance rule for shipments to Cuba in 2005.

“With the current economy placing new hardships on our producers, this is an opportune time to encourage the United States to change its trade policies toward Cuba,” Moran said. “Cuba is an important market for U.S. agriculture, as well as for manufacturers and distributors of food products.

“The actions of our own government have created a climate of uncertainty and have inhibited the sale of agricultural goods. Our unreliable and uncertain trade policies are sending the signal to Cuba that it is easier to purchase its products elsewhere. We are only hurting ourselves.”

The Moran bill, H.R. 1737, would permit direct payments between Cuban and U.S. financial institutions, a change that would permit U.S. exporters to receive payments within hours instead of days and will eliminate an unnecessary transaction fee.

It would also eliminate delays and denials for obtaining licenses to travel to Cuba for U.S. agricultural representatives engaging in sales and transport-related activities with Cuba. It will also allow Cuban officials to obtain visas for meetings with prospective U.S. exporters and for conducting sanitary and phytosanitary inspections of U.S. agriculture facilities.

Some observers have speculated the Obama administration would take a different view of trade relations with Cuba and relax the restrictions the previous administration placed on credit shipments of agricultural products under the Trade Sanctions Reform and Export Enhancement Act of 2000.

But U.S. Treasury Secretary Timothy Geithner has said he would not make the policy changes directed by the FY 2009 omnibus appropriations bill or H.R. 1105. In a letter to Senators Robert Menendez and Bill Nelson, Geithner said the Treasury Department believes the change “will likely have no influence on current financing rules.”

“I was disappointed to hear Secretary Geithner’s recent comments,” Moran said. “I had hoped this administration would abandon the failed policies of past administrations in regard to trade with Cuba. It is clear to me that Congress must speak directly on the issue if change in policy is to be accomplished.”

Moran and other members of the Cuba Working Group have sent a letter to Geithner to requesting a meeting to discuss U.S. trade policies. Moran is a senior member of the House Agriculture Committee.

The passage of TSREEA in 2000 allowed for the export of agriculture products to Cuba for the first time in 38 years. In 2005, however, a change by the Treasury Department to the cash payment in advance rule caused payments for agriculture exports to be made before ships leave U.S. ports rather than upon delivery, making it more difficult for American farmers to sell their products to Cuba.H.R. 1737 clarifies that a seller of a product receives payment at the time a Cuban purchaser takes physical possession of that product.

“We appreciate Congressman Moran’s dedication to easing trade and travel restrictions with Cuba,” said Jerry McReynolds, a wheat producer from Woodston, Kan., and the first vice-president of the National Association of Wheat Growers. “It is extremely important that we are able to trade with our close neighbors.”